Case Study: Flexibility & Expertise saved an airspace development

Loan Type: Development Finance   |   GVD: £4,325,000   |   Loan Size: £2.2m net   |   Term: 18 months   |   Interest Rate: 7% over BoE Base Rate

Development Finance is a type of finance that is specifically designed to support the funding of property development projects. Airspace developments are considered to be one of the most complicated types of property development projects, requiring a high level of expertise and knowledge.

The Client

The borrowing entity involved a BVI Company and one Director who was based offshore.

Situation

Many lenders are hesitant to support such projects due to their complexity. In this case, the borrower faced an additional challenge as they did not have any relevant experience in this field. However, our team at Aria Finance was able to overcome these obstacles by leveraging the expertise of a contractor with ample experience in developing airspace.

Our solution

The project involved the borrower who owned a Freehold property in London, SW6, where they were constructing five flats. Three of these flats already had pre-agreed sales with deposits taken, which had been released to the customer. As a result, the loan required for the project amounted to £2.2 million, contributing to the total build cost of £2.7 million.

Despite these challenges, our experienced bridging and development adviser, who has been an integral part of our team for over 20 years, was able to find a viable solution. They arranged a facility for the borrower using the airspace lease and a buy-to-let property as collateral.

This arrangement provided the necessary funds of £2.2 million, along with fees and interest, over an 18-month term. The customer was given 12 months to complete the construction and an additional 6 months to finalize the sales.

Result & Benefit

The successful outcome of this case was met with delight by both our introducer and the borrower. It serves as a compelling example of how Aria Finance can truly add value for borrowers with complex borrowing needs.

With a Gross Development Value (GDV) of £4,325,000, the loan size of £2.2 million net, an 18-month loan term, and an interest rate of 7% over the Bank of England Base Rate, this project showcases the flexibility and expertise of Aria Finance in supporting challenging and intricate property development ventures.